The president and the Federal Reserve chairman voiced cautious optimism yesterday that the economy could be beginning to stabilize. But the economy wasn’t cooperating.
Retail sales dropped sharply in March, the government reported, and wholesale prices fell steeply. Both pieces of data underscore the hard slog the nation faces to emerge from its deep recession and the limitations of more optimistic talk from Washington. The stock market fell 2 percent, as measured by the Standard & Poor’s 500-stock index.
President Obama and Fed Chairman Ben S. Bernanke were hardly effusive. Obama acknowledged that “there will be more job loss, more foreclosures and more pain” before the recession ends. But both men, in separate speeches, spoke of an end to the sense of free-fall that enveloped the U.S. economy in the final months of 2008 and first months of 2009.
Their words reflect a new phase of the government response to the financial crisis and recession. Unlike a few months ago, the major policies meant to prop up the economy– increased government spending, special lending programs and extensive efforts by the Fed to pump money into the economy — are now largely in place. Thus, senior officials are trying to encourage Americans to be confident about the future, so that those who still have their jobs will feel more comfortable buying a house, a car or other large items.
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